IHSS; EIC and Excluded income.

Forum|Forum|3 years ago
February 3, 2023
1 reply
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Hello everyone, so I am a live-in provider for two recipients. This will be my first time filing by myself, so I am a bit lost here. I’m adding both W-2’s to receive Earned Income Credit, however, both W-2 forms show a 0 in box one. Box 3-6 are not blank on either form. I have done a bit research and I did add IRS Notice 2014-7 excludable income on the description box. However, what exactly do I need to add on the amount box? I kept reading on discussion forums to add a negative amount or something like that, but that’s the part that confuses me.

DianeW777

Level 15

You need to add your wages to Box 1, Form W-2. If you have no wages listed in Box 1 of your W-2 form you will need to enter your wages so that they are included for earned income tax credit (EITC). Box 3 and Box 5 would show your social security and medicare wages, which should be the same as Box 1. It would be best to check with your employer to be sure there is no difference in the wages for any reason such as fringe benefits as example.

Once you know the number you should enter it in Box 1 so that TurboTax knows you have wages that qualify for IRS Notice 2014-7 excludable income.

Likewise you still enter the negative income to remove it from taxable income. This will allow it to be reviewed in TurboTax for the EITC.

Note: These wages are included as earned income for earned income tax credit (EITC) even if you do not include those wages as taxable income.

If your payments qualify to be excluded you should complete your tax return.

Medicare Waiver Payments Exclusion
IRS Publication 596 (will show the income chart for EITC)
Form 1040 Instructions, page 40.

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Anonymous

Diane,

thank you so much for your response! Is it mandatory for me to add in W-2 forms or is it only if I want to receive Earned Income Credit?

Also, is there any way I can forward you one of the forms? So you can take a quick glance at

it. I have received my W-2 form this way since 2017/18, so not sure how exactly my previous tax preparer filed for me.

Chlo3tran

Level 3

Hello. Did you follow Diane’s (employee tax expert) instructions to put total wages in Box 1… or did you do it how Critter showed, leaving Box 1 blank?